The fund's infrastructure and public equities portfolio dominated most returns
The Ontario Municipal Employees Retirement System (OMERS), reported a net investment return of 2.2 per cent for the first half of 2025, translating to $3.1 billion in gains.
While modest relative to past performance, the results reflect resilience in a turbulent investment environment marked by currency volatility, slow private market activity, and ongoing macroeconomic uncertainty.
As of June 30, 2025, OMERS' net assets stood at $140.7 billion.
The defined benefit, jointly sponsored and multi-employer Ontario-based pension plan’s performance was primarily driven by strong showings in infrastructure and public equities, which together offset softer returns from private investments.
“OMERS had a positive start in what was a particularly challenging environment for investors,” said Blake Hutcheson, OMERS' president and CEO. “As we manage through the current short-term challenges, in both public and private investing businesses this team continues to unlock opportunities that deliver both immediate and long-term value.”
OMERS has delivered an average annual net return of 8.7 per cent, underpinned by its global diversification and active management approach over the past five years. The long-term cumulative net investment income over the past decade has now reached $70.2 billion.
In the first six months of 2025, six of OMERS’ seven asset classes delivered positive returns. Infrastructure remained a cornerstone, (22 per cent) producing steady results aligned with expectations, while public equities benefited from gains in large-cap financials, communications services, and technology holdings (19 per cent).
The plan’s ongoing pivot toward fixed income also contributed positively, with public and private credit and government bonds supported by falling yields and steady interest income, OMERS noted in their release.
However, currency movements created significant headwinds. A sharp decline of more than 5 per cent in the US dollar negatively impacted returns across asset classes.
“Currency had an overall negative 1.2 per cent impact on our results, driven by a significant decline in the US dollar, and partially offset by strengthening of the British pound sterling and euro,” noted Jonathan Simmons, chief financial and strategy officer at OMERS.
“Active decisions to hedge currencies added almost 1 per cent to returns, protecting portfolio value.”
However, private markets proved more challenging for the fund as transaction activity and investor sentiment remained subdued in both private equity and real estate, holding back valuations, at 19 per cent and 15 per cent respectively. In private equity, slow earnings growth and industry-specific pressures further dampened returns.
Despite these headwinds, OMERS’ real estate portfolio posted a positive return, buoyed by strong fundamentals in office and hospitality segments (15 per cent).
OMERS closed the period with $17.4 billion in liquid assets, which provided the fund a cushion amid ongoing volatility. This liquidity not only supports pension obligations and derivative positions but also enables the plan to remain opportunistic.
“While we expect continued market instability for the remainder of 2025, we believe our diversification in quality assets positions us well to see through this cycle,” Hutcheson added.
“We proudly serve 640,000 Ontarians and we work every day to build lasting value that will serve them throughout their retirement.”
OMERS is also expanding its impact investments. Notably, the plan recently broke ground on a major residential development in Scarborough, Toronto - its first purpose-built housing project in the area in over a generation.
The three-tower, 1,300-unit project will include 21 per cent affordable housing, responding to structural supply shortages in the region, OMERS noted in their release.
“We believe our diversification in quality assets positions us well to see through this cycle, with ample liquidity to pursue opportunities that meet our objective of paying pensions for generations to come,” said Hutcheson.
